AN ECONOMIC ANALYSIS OF SERICULTURE IN ... - Language in · PDF fileSustainable Income in Erode District of Tamil ... silk producing state in India, namely Erode District of Tamil

Language in India www.languageinindia.com ISSN 1930-2940 14:9 September 2014

K. Prakasam & Dr. G. Ravi

Sericulture – An Ideal Enterprise for Sustainable Income in Erode District of Tamil Nadu332

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Language in India www.languageinindia.com ISSN 1930-2940 Vol. 14:9 September 2014

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Sericulture – An Ideal Enterprise for

Sustainable Income in Erode District of Tamil Nadu

K. Prakasam & Dr. G. Ravi =======================================================

Abstract

Sericulture is one of the rural-based agro industries with global reach. Some unique

features of the Sericulture Sector are its rural nature, ecologically and economically

sustainable activity for the poor, small and marginal farmers, agricultural labour and women

in particular. Sericulture is a labour intensive industry in all its phases. It can generate

employment up to 11 persons for every kilogram of raw silk produced. Out of which more

than 6 persons are women. In this paper, the cost and return structure of mulberry cocoon

production in the major silk producing state in south India namely Erode District in Tamil

Nadu are examined, as the stability and sustainability of sericulture enterprise highly depends

on its economic viability.

Key words: Sericulture, labour, wages, Tamilnadu

Introduction

Sericulture is one of the rural-based agro industries with global reach. Some unique

features of the Sericulture Sector are its rural nature, ecologically and economically

sustainable activity for the poor, small and marginal farmers, agricultural labour and women

in particular. Sericulture is a labour intensive industry in all its phases. It can generate

employment up to 11 persons for every kilogram of raw silk produced. Out of which more

than 6 persons are women. The product of sericulture, silk, has social, religious significance

in the lives of Indians, since is closely associated with all celebrations of milestones of life in

India and South Asia. In addition, sericulture is a very important part of the economics of

several states in India such as Assam,Bengal, Karnataka and Tamilnadu. This specialized

agricultural industry is also focused on the income and lives of rural women.

Review of Literature

http://www.languageinindia.com/





Studies on Costs and Returns of Cocoon Production

Lakshmanan, etal. (2000) compared economic benefits over investment in rearing

bivoltine and crossbred cocoons in their study one economics of bivoltine versus cross breed

cocoon production in K.R. Nagar taluk of Mysore district. The study revealed that bivoltine

rearing earns higher net returns than crossbred production, owing to climatic suitability,

skilled man power and technical guidance received from developmental agencies.

Hajare et al (2008) observed that the contribution from sericulture enterprise was

found to be highest at 52 percent (Rs 82315/ha/yr) followed by paddy – sun flower (20

percent)

Soybean –wheat (15 percent) and soybean gram (12 percent) in paddy area, where as

it was as high as 54 percent followed by cotton – pigeon pea (17 percent) soybean-wheat (16

percent) and soy bean – gram(13 percent) in cotton area and sustained income continued upto

15-20 years.

Objectives of the Study

1. To study growth rate of Production and productivity of Area under mulberry and

cocoon production in Tamilnadu from 2000-01 to 2010-11.

2. To analyze the Benefit-Cost ratio of mulberry sericulture for per Acre in Erode

District of Tamil Nadu.

3. To identify the S.W.O.T analysis of the Sericulture Industry in the study area.

Hypotheses

1. There is a fluctuation in growth rate of area under mulberry and cocoon production in

Tamilnadu.

2. The Sericulturist gets better yield and income per acre per year.

Methodology

This study was carried out in the major silk producing state in India, namely Erode

District of Tamil Nadu was selected for data collection based on the area under mulberry and

Silkworm Rearing. The Primary data on economic aspects viz., costs and return in cocoon





production were collected and randomly selected from the sample farmers through personal

interview method by using pre-test interview schedule for pilot study.

Farmers having two year old established mulberry garden were considered for the

study. The secondary data were collected during the period 2000-01 to 2010-11 from

sericulture Department in Gobichettypalayam and Erode District of Tamil Nadu. For this

Analysis of data, the Growth rate of Trend line and Benefit Cost ratio and co-efficient of

variation have been worked out in addition the diagrammatic representations have been

drawn.





RESULT AND DISCUSSION

Table - 1

Growth Rate of Area under Mulberry and Cocoon Production in Metric Tones in Tamilnadu from

2000-01 To 2010-2011

Years

Area under

mulberry in

metric tones as

on 31st march

%

A.G.R

(Average

Growth

rate)

Cocoon Production in

metric tones as on 31st

march

%

A.G.R.

(Average

Growth rate)

2000-01 27651 9.93 - 5138.00 7.54 -

2001-02 23382 8.40 - 15.44 5882.10 8.63 14.48

2002-03 13485.63 4.84 42.32 4005.30 5.87 - 31.91

2003-04 10063.61 3.61 - 25.38 2124.20 3.12 - 46.97

2004-05 12683.05 4.55 26.03 3101.20 4.55 45.99

2005-06 16534.82 5.94 30.37 5224.90 7.66 68.48

2006-07 25107.07 9.02 51.84 7930.50 11.63 51.78

2007-08 35117.42 12.61 39.87 9675.70 14.19 22.01

2008-09 33361.25 11.98 - 5.00 9949.10 14.59 2.83

2009-10 35551.00 12.77 6.56 8587.60 12.59 - 13.68





2010-11 45513.40 16.35 28.02 6568.38 9.63 - 23.51

N=11 X=278450.25 100.00 ___ Y=68187.88 100.00 ___

Source : Compiled from secondary data





N=11 x=278450.25 Y=68187.88

The above table 1 analyses the growth rate of area under mulberry and cocoon

production in metric tones in Tamilnadu during the period of 2000-01 to 2010-11.

According to it the average growth rate for area under mulberry raised from 2004-05 to

2006-07. Due to the effect of both central and state Seri-cultural department, the growth rate

of mulberry raised and the usage of mulberry is enormous. Besides feeding to silk worm

(Bombox mori), mulberry is used as a food for rearing cattle, stick of the mulberry leaves is

used as fire wood and in foreign countries mulberry leaves are used for preparing tea.

The average growth rate of mulberry came down from 2007-08 to 2009-10. This is

due to some farmers uprooting the mulberry plant. (i) negative impact of papaya mealy bug

disease of pest on mulberry leaves. (ii) fluctuation of cocoon price. and (iii) crop

diversification.

Later the growth rate of mulberry raised due to (i) few farmers planting of the

mulberry, with the support, encouragement and guidance of sericulture department.

Like-wise the average growth rate of cocoon production increased from 2004 to

2006. But before this period and after this period the average growth rate was negative and

the growth rate was declining owing to the following reasons (i) dumping of Chinese silk

into our nation; (ii) government reduced import duties on silk and silk goods; (iii) papaya

mealy bug disease of pest occurred in Tamilnadu; (iv) Tamil Nadu is the 4th

place in

mulberry production in India; (v) technical service Centre (Seri-culture department) is not

established in many of the district in Tamil Nadu; (vi) Frequent changes in cocoon price;

(vii) farmers may not be aware of usage of mulberry and raw silk; (viii) the climate condition

which required for mulberry planting and silk worm rearing may not be conducive for all the

districts of Tamil Nadu; (ix) scarcity of labour power and so only they have used family

labour.





Figure - 1

The Growth rate of Area under mulberry and Cocoon Production in metric tones of

Tamilnadu





TABLE - 2

Productivity Per (Ha) for Area Under Mulberry Cultivation and Cocoon Production from 2000-01 to 2010-11 in

Tamil

Nadu

Years Area under mulberry

(Ha) in metric tones

Cocoon Production in

metric tones

Productivity of

cocoon (kg/Ha)

X

xx

86.252x

2000-01 27651 5138.00 185.82 - 67.04

2001-02 23382 5882.10 251.57 - 1.29

2002-03 13485.63 4005.30 297.01 44.15

2003-04 10063.61 2124.20 211.08 - 41.78

2004-05 12683.05 3101.20 244.52 - 8.34

2005-06 16534.82 5224.90 315.99 63.13

2006-07 25107.07 7930.50 315.87 63.01

2007-08 35117.42 9675.70 275.52 22.66

2008-09 33361.25 9949.10 298.22 45.36





Source : Compiled from secondary data

2009-10 35551.00 8587.60 241.56 -11.3

2010-11 45513.40 6568.38 144.32 -138.54

N=11 278450.25 68187.88 2781.48 - 268.29

+ 238.31

48.2781AP - 29.98





N=11, X = 2781.48 x = 252.86 = 9.04

= 04.971.8111

)98.29()( 22

n

xx

= 9.04

C.V = 33.010048.2781

04.9100

x

C.V = 0.33

The above Table 2 highlights the productivity per (Ha) for area under mulberry

cultivation and cocoon production in Tamilnadu from 2000-01 to 2010-11 periods. The

productivity of cocoon in kilo gram fluctuated year to year. This is due to (i) crop diversification

(ii) fluctuation of cocoon price (iii) scarcity of manpower and (iv) proper guidance and support

of technical service centre (Sericulture department) to new cultivators of mulberry and cocoon

bearers. The average productivity of cocoon in kilo gram and co-efficient of variation have been

worked out, i.e. 252.86 and 0.33 respectively. The variation is meager in percentage 0.33% when

the productivity of cocoon production is consistent and vice versa.





Figure - 2

Productivity per/kg/ Ha for Area Under Mulberry Cultivation and Cocoon Production in

Tamil Nadu





Table No. - 3

Costs of Mulberry leaf production (Rs/acre/year)

S.No. Items Tamil Nadu

A Operational Cost Cost %

1 Bullock - -

2 Labour 5494.47 14.46

3 Farmyard Manure 8743.22 23.01

4 Fertilizers 7076.87 18.63

5 Irrigation Water 5859.09 15.42

6 Plant Protection Chemical 3576.87 9.41

7 Other Costs 3437.90 9.05

8 Interest on Working Capital 2159.42 5.68

Total Variable Cost 36347.84 95.66

B Fixed Costs - -

1 Apportioned Cost of

Establishment of Mulberrry

garden

1647.88 4.37

Total Leaf production cost 37995.72 100.00

Source: Compiled from primary data

The above table no 3 has been analysed by the details of cost of cultivation of mulberry

garden per acre per year. Cocoon production involves two distinct activities namely mulberry

leaf production, which is the food for silk worm, and silk worm rearing. Therefore, the cost of

production of mulberry leaf and silk worm rearing to produce cocoon were separately worked

out. The total cost of leaf production was Rs.37,995.72 per acre per year in Tamil Nadu. Among

the cost components, farmyard mannur and fertilizers were the major items amounting to

Rs.15,820.09 per year, which accounted for 23.01% and 18.63% respectively in the total cost of

mulberry leaf production.





Mulberry being a perennial crop, the costs incurred on establishment of mulberry garden

was apportioned to the economic life span of mulberry garden which was considered as 15 years

and accounted as fixed costs in working out the cost of mulburry. The fixed costs was estimated

to Rs.1,647.68, i.e. 4.34% of the total cost.

Table No.4

Costs in Silkworm rearing (Rs./acre/year)


Cost in Rs. %

Average number of Disease Free Layings

reared

1079.33

A Variable costs

1 Leaf 37995.72 35.09

2 DFLs / Chawkiworms 8702.68 8.04

3 Disinfectants 8472.29 7.82

4 Materials 960.76 .89

5 Labour 35320.42 32.62

6 Hiring charges of mountages - -

7 Transportation and marketing 4862.40 4.49

8 Interest on working capital 864.30 .80

9 Total variables costs 97178.57 89.74

B Fixed Cost

Depreciations on building and equipments 11107.11 10.26

Total Cost (A +B) 108285.68 100

Cost / K.g. Cocoon 134.58 -


The above table no. 4 has been worked out by the details of the expenditure incurred on

different items in silkworm rearing in Erode District of Tamil Nadu. The Tamil Nadu farmers

reared more number of eggs (1079.33 DFLs/acre/Year). The total cost of production of cocoon

was estimated to Rs.1,08,285.66 in which the variable costs accounted for 89.74%. Among the

cost components, leaf was the major items in silkworm rearing,which amounted to Rs.37,995.72





representing 35.09% of the total cost of cocoon production in Tamil Nadu,followed by leaf,

labour were the major cost component, which constituted 32.62% (Rs.35,320.42) of the total cost

of cocoon production in Tamil Nadu. As the Tamil Nadu farmers used the mountages owned by

them for spinning of silkworm larvae to form cocoon. They did not incur any expenditure on this

head. The other variable cost components include transportation and marketing charges, interest

on working capital and material costs for cocoon production.

The cost of one kg. of cocoon production was worked out to Rs.134.58.





Table No.5

Revenue from cocoon production (Rs/acre/year)


Revenues

1. Average Cocoon yield (k.g./100 DFLs) 74.55

2. Average Cocoon Price (Rs./Ks) 224.47

3. Cocoon Production (K.g) 804.62

4. Total Income from Cocoon 1,80,613.05

5. Income from by products 7486.97

6. Total Revenue 188100.02

Total Cost 108285.68

Net Return 79814.34

B.C. Ratio 1.74


The above table No. 5 has been shown by the calculation of net revenues from cocoon

production in Erode Area of Tamil Nadu. The sample farmers of Tamil Nadu in Erode area

attained an average cocoon yield of 74.55 kg / 100 DFLs and their cocoon fetched an average

price of Rs.224.47/kg. Thus the total income from cocoon has been arived at of Rs.1,80,613.05

from 804.62 kg. of cocoon production.

The gross revenue, which includes the revenue from sales of cocoon and value of by

products generated, worked out to Rs.1,88,100.0.2. The Tamil Nadu farmers obtained the net

revenue of Rs.79,814.34 acre/year. The Benefit Cost ratio was worked out to 1.74 in mulbems

cocoon production of Tamil Nadu. From this analysis, the second hypothesis has been verified

by Benefit – Cost ratio, i.e. the mulburry silkworm rearing is a highly profitable agro based

enterprises. Hence, it has been accepted.

Figure 3. for SWOT Analysis in Sericulture Industry





Findings

Sericulture

Industry

1. Low

Gestation

High returns

2. High

employment

potential

3. Women

Friendly

occupation

4. Ideal

Programme

for weaker

sections of

the society

5. Eco- friendly

activity

1. Inadequate

Market

2. Occupational

Diseases

3. Unstable

cocoon price

4. Lack of

awareness

about use of

By products

5. Indian Silk is

low quality and

high price

1. Non availability

of labour

2. Competitors

3. Unpredictable

China’s Silk

Policies

1. Generation of

Rural employment

and reduction of

migration

3. Value addition and

product

diversification

2. Sericulture

department support

Strengths

Weakness

Opportunities

Threats

External Environment

Internal Environment





The average growth rate of both mulberry and cocoon production came down from

2007-08 to 2009-10 due to negative impact of papaya mealy bug disease of pest which

occurred on mulberry leaves.

The average productivity of cocoon in kilogram is 252.86 in Tamil Nadu.

The farm yard manure and fertilizers costs are major component in total cost of mulberry

cultivation, i.e. 23.01% and 18.63% respectively.

The leaf and labour costs are the major components in total cost of silk worm rearing. i.e.

35.09%. and 32.62% respectively.

An average cocoon price is Rs./Kg is 224.47

The benefit – cost ratio is to 1.74.

Problems of the mulberry sericulture in the study area

1. The shortage of labourers it was difficult to carryout the sericultural operations as

silkworm rearing is labour intensive enterprise.

2. During the summer there was shortage of irrigation water for mulberry garden which

inturn reduced mulberry yield thus reducing the number of DFL reared.

3. Fluctuations in cocoon prices.

4. Absence of strict discase control measure.

5. Prevalence of old technologies

6. Poor grading system of cocoons

7. Manipulation by the intermediaries in the trade of raw silk.

8. Lack of efforts to increase area.

9. Decline in the area under mulberry and fluctuations in its production.

10. Failure to capture internal market due to poor quality.

Conclusion

In India, sericulture is not only a traditional but also a living culture. It is a farm-based,

labour intensive and commercially attractive economic activity falling under the cottage and

small scale sector. It particularly suits rural – based farmers, entrepreneurs and artisans as it

rearing low investment, but, with potential for relatively high returns. It provides income and





employment to the rural poor,especially, farmers with small land holdings and the marginal land

holding and weaker sections of the society. Several socio-economic studies have affirmed that

the benefit-cost ratio in sericulture is the highest among comparable agricultural crops.

Policy Implications

1. Extension agents should give more importance in Educating farmers about better

protection measures and proper disinfection methods.

2. Farmers should be educated about optimal use of labour.

3. Introduce high yielding mulberry varieties.

4. Quality – based pricing should be given.

5. Provide assistance to producers to shift to bivoltine silk.

6. Adopt clusters of villages for better marketing conditions.

7. Impose anti-dumping duty.

8. Implement silk mark in strict manners.

9. Develop pest management measures against various pests of mulberry and silkworm.

10. The farmers must be encouraged to adopt recommended practices and technology to

the full extent.





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References

1. Lakshmanan.S, Devi, R.G.G. and Suma N. 2000 “Studies on economic bivoltine versus

cross breed cocoon production in K.R. Nagar Taluk of Mysore district”. Indian journal of

sericulture 39 (2) pp-149-151.

2. Hajare, TN Jadhav. A.D., Jagadish Prasad, challa, O and Kalantri, L.B., 2008, Sericulture

brings Better Income. Indian Silk 46(9):27.

3. Saha A K India Farming vol. No.-53 July 2003 pp 3 to 4.

4. Dr.vigneshwara varmudy, “Silk industry: need to become competitive” Facts For You

December 2011 Page No.18 to 19.

5. www.tnsericulture.gov.in"

K. Prakasam

Assistant Professor of Economics Wing, DDE

Annamalai University

College Road

Annamalai Nagar 608002

Tamilnadu

India

[email protected]

Dr. G. Ravi

Professor of Economics

Department of Economics

Annamalai University

College Road

Annamalai Nagar 608002

Tamilnadu

India


mailto:[email protected]

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AN ECONOMIC ANALYSIS OF SERICULTURE IN ... - Language in · PDF fileSustainable Income in Erode District of Tamil ... silk producing state in India, namely Erode District of Tamil